Pre Session Market Analysis for May 17, 2011

Commentary

Religare

Posted By: Religare

Published: Tuesday, May 17, 2011, 9:32 [IST]

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The key equity averages are likely to open negative as most of the Asian stocks are trading lower pushing the region"s benchmark index to a fourth day of losses, while the won and oil fell following worries over the pace of the global economic recovery.

Today, Nifty would have a support at 5,444 and resistance at 5,526 and BSE Sensex has support at 18,161 and resistance at 18,436.

The MSCI Asia Pacific Index fell 0.5% at 133.61. Further, Japan"s Nikkei 225 is trading lower by 0.44% at 9,516.03 as Greece asked for more bailout funds and slower-than-estimated manufacturing growth in the New York region fueled concerns about the global economic recovery.

However, the Shanghai Composite is down by 0.71% to 2,828.90 and Hang Seng Index fell 0.31% to 22,888.27. Separately, Seoul Composite and Jakarta Composite are trading lower by 0.47% and 0.86%, respectively. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with downside movement. Realty, Metal and Banking pivotals will be in focus today.

Previous Session

On Monday, the domestic bourses ended the session on a lackluster note as profit booking emerged amidst the steepest hike in petrol prices on Saturday. The major sell-off was witnessed among the rate sensitive sectors including Realty, Metal and Banking. During the morning trade, most of the Asian stocks traded lower on concern of impact of Greece"s debt crisis on global economy.

Further, the Japanese market plunged as the Goldman Sachs Group Inc. degraded rating on the country"s equities. After opening in the negative terrain, the benchmark indices plunged further. As the day progressed, the market entered a tight range and traded volatile thereon. The benchmark Nifty was dragged near the 5,480 level, however, no significant movement was witnessed on either side post the morning slide.

The petrol prices hike by a steep Rs 5 per litre dampened the sentiment among the domestic stocks during the session. Further, worse than expected inflation figures pressurized the sentiment further. The rate sensitive sectors like Realty, Metal and Banking space took the major hit during the session as concerns rose over further rate hike by RBI to contain high inflation.

Finally, the benchmarks were seen closing near their respective session lows, plunging by nearly 1% each. The negative opening for the European markets had further dampened the sentiment in the domestic front.

The BSE Sensex closed at 18,345.03 down by 186.25 points or by 1.01% and NSE Nifty closed at 5499.75, lower by 45.75 points or by 0.83%. The BSE Midcap was at 6,849.59, down by 52.99 points or by 0.77% and the BSE SmallCap closed at 8,306.55, lower by 61.67 points or by 0.74%. The BSE Sensex touched intraday high of 18,492.68 and intraday low of 18,319.88.

On Monday, the U.S. markets closed lower after spending most of the morning mixed, but an rebound by the dollar and weakness among tech stocks fuelled selling. Pressure was most witnessed by the Nasdaq, which dropped to its lowest level in almost one month.

The initial mood was lackluster as losses abroad and news that IMF managing director Strauss-Kahn was arrested ahead of an important meeting dampened sentiment. Further, a downturn in the dollar resulted in some buying interest, but the greenback eventually bounced back so that it ended the day with a tepid loss of 0.2%.

Further, large-cap tech stocks weighed most heavily on the Nasdaq, which closed just above its 50-day moving average. On the sectoral front, consumer discretionary stocks were pressurized as the sector's 1.4% loss came as Lowe's Companies (LOW 24.84, -0.92) dropped to a three-month low following a disappointing quarterly report, which featured an earnings miss and disappointing forecast.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a loss of 47.38 points or 0.38% at 12,548.37, while NASDAQ index finished lower by 46.16 points or 1.63% to 2,782.31. The S&P 500 (SPX) closed down by 8.3 points or 0.62% to 1,329.47.

The FIIs on Monday stood as net seller in equity and debt. Gross equity purchased stood at Rs. 2,300.70 Crore and gross debt purchased stood at Rs. 680.30 Crore, while the gross equity sold stood at Rs. 6,007.10 Crore and gross debt sold stood at Rs. 1092.10 Crore. Therefore, the net investment of equity and debt reported were Rs. (3706.40) Crore and Rs. (411.80) Crore.

Top traded Volumes on NSE Nifty - Jaiprakash Associates Ltd. 11,066,659, ITC Ltd. 7,697,214, Oil And Natural Gas Corporation Ltd. 7,655,185, Hindalco Industries Ltd. 6,309,738, Infrastructure Development Finance Company Ltd. 3,700,922. On BSE, total number of shares traded was 24.99 Crore and total turnover stood at Rs. 2,092.90 Crore. On NSE, total number of shares traded was 44.54 Crore and total turnover stood at Rs. 8,386.56 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 420,252 with a total turnover of Rs. 10,751.20 Crore. Along with this total number of contracts traded in stock futures were 435,707 with a total turnover of Rs. 11,180.18 Crore. Total numbers of contracts for index options were 2,659,968 with a total turnover of Rs. 74,370.16 Crore. and total numbers of contracts for stock options were 108,310 with a total turnover of Rs. 2,970.60 Crore.